Unpacking Adaptability

Abstract:     
Legal Origins Theory -- first proposed over a decade ago by Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer and Robert W. Vishny -- holds that adaptable legal systems produce superior substantive law that, in turn, leads to superior economic outcomes. In this essay, we examine this adaptability hypothesis. The chief methodological challenge confronting the empirical study of adaptability is that researchers cannot measure adaptability directly. Legal Origins Theory attempts to surmount this challenge, in the first instance, by using legal institutions as proxies for adaptability. One of the foundational assumptions of Legal Origins Theory is that courts engage in highly contextualized rulemaking that improves the quality of law over time. Legal Origins Theory then takes this assumption one step further, asserting that “judicial law making and adaptation play a greater role in common than in civil law.” Thus, legal origin becomes a second-order proxy for adaptability. We contend that adaptability is undertheorized and that a more nuanced understanding of adaptability reveals the implausibility of legal origin as proxy for adaptability.

Number of Pages in PDF File: 18

Keywords: LLSV, legal origins, adaptability, formalism

JEL Classification: G30, K00, N20, P51

Accepted Paper Series